Petitions For Instructions And Declarations Of Rights---Not All Trust Litigation Is Necessarily Nasty

Frequently trust litigation stems from a heated dispute between trustees and beneficiaries, or co-trustees who cannot agree on the trust administration, or beneficiaries who cannot agree on their respective rights under a trust instrument, or other disagreements between various parties incident to a trust.  When such disputes cannot be resolved amicably by the parties themselves, with or without the assistance of legal counsel, sometimes the only practical recourse is to file suit and let a judge or jury decide who should prevail depending upon the facts,  circumstances and evidence. 

With this in mind, Ark. Code Ann. § 28-73-201(b)  does not mandate continuing court supervision of trusts.  Rather, a court may intervene in the administration of a trust whenever it is asked to by an “interested person or as provided by law.”  Ark. Code Ann. § 28-73-201(a).  Such judicial proceedings involving a trust “may relate to any matter involving the trust’s administration, including a request for instructions and an action to declare rights.”  Ark. Code Ann. § 28-73-201(c) (emphasis added). 

In sum, occasionally trust-related judicial proceedings do not involve an alleged breach of trust, breach of fiduciary duty, misappropriation of assets, etc.  That's a good thing because such disputes---often involving family members fighting over money---can turn into some of the ugliest and most contentious wealth wars imaginable. 

Rather, petitions for instructions and requests for declaratory judgments---such as the ones contemplated in Ark. Code Ann. § 28-73-201(c)---are typically less heated because theoretically they involve an innocuous request that the court merely provide instructions or guidance to the trustee or beneficiaries. Perhaps the proceeding stems from an alleged ambiguity in the trust terms, maybe there is a question regarding which beneficiaries are supposed to receive trust income or principal, or possibly the court is simply being asked to declare the rights and obligations of various individuals associated with the trust.  

While these matters can still be adversarial in nature, they are usually not the classic battles in which someone is claiming that another party necessarily engaged in intentional fraud or other wrongdoing.  Accordingly, when appropriate this type of proceeding should be considered as an option whenever there is a need for court intervention in a situation which does not necessarily rise to the level of a full-blown  "divorce on steroids," as we sometimes call the nastiest of the inheritance-related disputes in which we are frequently asked to become involved. 

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

 

Financial Elder Abuse And Exploitation In Arkansas

I have written before about our aging population and the effect that it will have on estate, trust, probate and inheritance litigation in the decades to come.  This stems from a number of demographic trends including (1) massive numbers of Baby Boomers entering retirement age and (2)  medical advances allowing people to live longer than ever before (but often with decreased physical and mental abilities).

An increasing number of older and incapacitated people will naturally result in an increasing number of elderly adults who are susceptible to, and actually subjected to,  abuse and exploitation.  This elder abuse can take a number of different forms, including physical, emotional, sexual and financial.  While all of these are bad, my focus for purposes of this blog post is on financial elder exploitation.  

There are agencies and organizations which play an educational and preventive role when it comes to elder abuse, but while doing good work they are often   overworked, understaffed and underfunded.  For example, Arkansas Adult Protective Services---a division of the Arkansas Department of Human Services---has a hotline number and is charged with the responsibility of investigating and intervening where there are reports of abuse, neglect, and exploitation of adults who are physically or mentally impaired and unable to protect themselves from harm.  

According to the National Committee for the Prevention of Elder Abuse

"Elder financial abuse spans a broad spectrum of conduct, including:

  • Taking money or property

  • Forging an older person's signature

  • Getting an older person to sign a deed, will, or power of attorney through deception, coercion, or undue influence

  • Using the older person's property or possessions without permission

  • Promising lifelong care in exchange for money or property and not following through on the promise

  • Confidence crimes ("cons") are the use of deception to gain victims' confidence

  • Scams are fraudulent or deceptive acts

  • Fraud is the use of deception, trickery, false pretence, or dishonest acts or statements for financial gain

  • Telemarketing scams. Perpetrators call victims and use deception, scare tactics, or exaggerated claims to get them to send money. They may also make charges against victims' credit cards without authorization

Who are the perpetrators?

Family members, including sons, daughters, grandchildren, or spouses. They may:

  • Have substance abuse, gambling, or financial problems

  • Stand to inherit and feel justified in taking what they believe is "almost" or "rightfully" theirs

  • Fear that their older family member will get sick and use up their savings, depriving the abuser of an inheritance

  • Have had a negative relationship with the older person and feel a sense of "entitlement"

  • Have negative feelings toward siblings or other family members whom they want to prevent from acquiring or inheriting the older person's assets

Predatory individuals who seek out vulnerable seniors with the intent of exploiting them. They may:

  • Profess to love the older person ("sweetheart scams")

  • Seek employment as personal care attendants, counselors, etc. to gain access

  • Identify vulnerable persons by driving through neighborhoods (to find persons who are alone and isolated) or contact recently widowed persons they find through newspaper death announcements

  • Move from community to community to avoid being apprehended (transient criminals)

Unscrupulous professionals or businesspersons, or persons posing as such. They may:

  • Overcharge for services or products

  • Use deceptive or unfair business practices

  • Use their positions of trust or respect to gain compliance

Who is at risk?

The following conditions or factors increase an older person's risk of being victimized:

  • Isolation

  • Loneliness

  • Recent losses

  • Physical or mental disabilities

  • Lack of familiarity with financial matters

  • Have family members who are unemployed and/or have substance abusers problems

Why are the elderly attractive targets?

  • Persons over the age of 50 control over 70% of the nation's wealth

  • Many seniors do not realize the value of their assets (particularly homes that have appreciated markedly)

  • The elderly are likely to have disabilities that make them dependent on others for help. These "helpers" may have access to homes and assets, and may exercise significant influence over the older person

  • They may have predictable patterns (e.g. because older people are likely to receive monthly checks, abusers can predict when an older people will have money on hand or need to go to the bank)

  • Severely impaired individuals are also less likely to take action against their abusers as a result of illness or embarrassment

  • Abusers may assume that frail victims will not survive long enough to follow through on legal interventions, or that they will not make convincing witnesses

  • Some older people are unsophisticated about financial matters

  • Advances in technology have made managing finances more complicated

What are the indicators?

Indicators are signs or clues that abuse has occurred. Some of the indicators listed below can be explained by other causes or factors and no single indicator can be taken as conclusive proof. Rather, one should look for patterns or clusters of indicators that suggest a problem.

  • Unpaid bills, eviction notices, or notices to discontinue utilities

  • Withdrawals from bank accounts or transfers between accounts that the older person cannot explain

  • Bank statements and canceled checks no longer come to the elder's home

  • New "best friends"

  • Legal documents, such as powers of attorney, which the older person didn't understand at the time he or she signed them

  • Unusual activity in the older person's bank accounts including large, unexplained withdrawals, frequent transfers between accounts, or ATM withdrawals

  • The care of the elder is not commensurate with the size of his/her estate

  • A caregiver expresses excessive interest in the amount of money being spent on the older person

  • Belongings or property are missing

  • Suspicious signatures on checks or other documents

  • Absence of documentation about financial arrangements

  • Implausible explanations given about the elderly person's finances by the elder or the caregiver

  • The elder is unaware of or does not understand financial arrangements that have been made for him or her."

In Arkansas, if the elder abuse is bad enough it can actually constitute a criminal offense and be prosecuted.  For example, Ark. Code Ann. Sec. 5-28-103 prohibits the abuse or exploitation of an endangered or impaired person, and Ark. Code Ann. Sec. 5-28-101 defines certain terms in the statute which encompass many types of wrongdoing, including financial abuse and exploitation.  Depending upon the amount of money or property misappropriated, the crime can constitute (1) a misdemeanor warranting a substantial fine or (2) a felony punishable by substantial prison time.  

However, it seems that prosecutors are often so overwhelmed with "street crimes" involving drugs, violence, sex, theft, etc. that "white collar" crimes involving financial exploitation (which often can be more difficult to prove) are frequently not pursued as a practical matter.  Accordingly,  the person aggrieved---or commonly someone acting for or on their behalf (because the elderly person may be incapacitated, or unable or unwilling to take action)---may necessarily be forced to resort to a civil court rather than a criminal court.  While such legal action will not result in the wrongdoer being criminally punished, depending upon the facts, circumstances and evidence they may be assessed with compensatory or potentially even punitive damages, along with attorney's fees, costs, and interest on the amounts misappropriated. 

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Understanding Estate, Trust, Probate And Inheritance Litigation In Terms Of "Pie"

I love pie, and it's probably my favorite type of dessert.  I have fond childhood memories of my Grandmother making fantastic butterscotch meringue pies whenever we would travel to her house back when I grew up in Oklahoma.  Every Fall I look forward to eating pecan pie, and I can cook a pretty good one using a recipe and method that I read about in Southern Living magazine many years ago.  In my opinion, cakes, cookies and other desserts pale in comparison to a big slice of pie accompanied by a big scoop of Blue Bell ice cream (or Arkansas-based Yarnell's).  

That said, I find that when talking to clients it is often helpful to explain estate, trust, probate and inheritance litigation and disputes  in terms of "pie."  For example, sometimes the question is "who gets a piece of the pie?"  There could be a conflict   about who the beneficiaries are in a will or trust.  Or, if there was not a will or trust a Court could need to determine who the deceased's heirs are for purposes of intestate succession.  If a will or trust sought to exclude someone and they challenge it, the enforcement or non-enforcement of that term could dictate whether or not they get a piece of the pie at all.

Sometimes the issue revolves around "how big a slice does everyone get?"  For example, a will or trust often leaves different types or percentages of property to different people or entities.  In an intestate estate where the deceased did not leave a will or trust (or perhaps those documents were found to be invalid), one's status as a surviving spouse, surviving child, surviving parent, surviving sibling, surviving grandchild, etc. will determine the size and extent of one's piece of the pie.

Other times the question involves "what is even in the pie?"  What I mean by  that is that property formally conveyed to a trust should pass through the trust, but property not conveyed to that trust will pass outside the trust (typically through the estate).  Likewise, whether or not an estate is formally opened or a trust even exists, some property can automatically pass by beneficiary designations (IRA's, life insurance, etc.) or operation of law (transfer on death accounts, joint tenants with right or survivorship accounts, etc.) instead of passing to or through a trust, estate, etc.  

Finally, occasionally the concern focuses upon "whether anyone ate some (or all) of the pie before it got sliced  up?"  In other words, if there was a misappropriation of monies or assets the dispute may necessarily be primarily concerned with (1) attempting to investigate, locate and recover the missing property, and (2) holding whomever took it civilly or criminally responsible, if appropriate.  

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Power Of Attorney Problems---Who Has The Right To Try And Fix Them?

I have previously written about powers of attorney, which can be great estate planning tools in the right hands and terrible estate planning hands in the wrong hands ("licenses to steal").  

In other words, powers of attorney can be very useful for assisting persons with making financial and health care related decisions.  On the other hand, if the "agent" ends up taking advantage of the "principal" by carrying out acts which are not in the principal's interest (and which, for example, are instead in the agent's interest), the principal can be financially devastated (e.g., the agent could clean out the agent's bank account or sell their real estate, etc.)  or their health can be prejudiced (e.g., the agent could withhold treatment, etc.).  

Sometimes people other than the principal (perhaps the principal is incapacitated or deceased)  want to challenge the agent's actions, and a question of "legal standing" is raised.  Put another way, there is occasionally an issue regarding who if anyone besides the principal  has the right to challenge certain conduct carried out pursuant to a power of attorney.

In Arkansas that question is often answered by Ark. Code Ann. Sec. 28-68-116, which is the "Judicial Relief" section of the Uniform Power Of Attorney Act codified at Ark. Code Ann. Sec. 28-68-101, et seq.  The Uniform Law Comment to Ark. Code Ann. Sec. 28-68-116 states that "[t]he primary purpose of this section is to protect vulnerable or incapacitated principals against financial abuse."  

The statute says that:

(a)   The following persons may petition a court to construe a power of attorney or review the agent's conduct, and grant appropriate relief:

(1)   the principal or the agent;

(2)  a guardian, conservator, or other fiduciary acting for the principal;

(3)   a person authorized to make health-care decisions for the principal;

(4)   the principal's spouse, parent, or descendant;

(5)   an individual who would qualify as a presumptive heir of the principal;

(6)   a person named as a beneficiary to receive any property, benefit, or contractual right on the principal's death or as a beneficiary of a trust created by or for the principal that has a financial interest in the principal's estate;

(7)   a governmental agency having regulatory authority to protect the welfare of the principal;

(8)   the principal's caregiver or another person that demonstrates sufficient interest in the principal's welfare; and

(9)   a person asked to accept the power of attorney.

(b)   Upon motion by the principal, the court shall dismiss a petition filed under this section, unless the court finds that the principal lacks capacity to revoke the agent's authority or the power of attorney.

As one can see, a wide variety of individuals has the power to challenge actions taken under a power of attorney.  The Uniform Law Comment to this statute says that such "broad categories" serve the purpose of "[a]llowing any person with sufficient interest to petition the court" and this "is the approach taken by the majority of states that have standing provisions."

I have represented (1)  power of attorney agents, (2)  power of attorney principals, and (3)  family members and friends of power of attorney principals.   For the first group,  this statute is a good reminder that they need to be careful  acting under a power of attorney because any number of people have legal standing to challenge their conduct.  For the second and third groups, this statute allows for a wide array of persons to contest agent behavior which they perceive to be unfair to or indicative of exploitation of a principal.  

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

 

Presentation At The 2016 Arkansas Bar Association Annual Meeting

Today one of my law partners, Pat James, and I will be privileged to make a presentation at the Arkansas Bar Association Annual Meeting in Hot Springs, Arkansas, where over 1,200 lawyers and judges congregate every June for 4 days of continuing education seminars,  meetings, and socializing.   The title of our presentation is---not surprisingly given that you are reading this blog---"WEALTH WARS:   Arkansas  Estate, Trust, Probate And Inheritance Litigation."

The hour-long presentation is designed to be a broad overview, for the general practitioner, of numerous topics arising in this area of law.   For an A to Z listing of the topics to be discussed, inclusive of some written materials containing a checklist of common claims and causes of action; a checklist of common defenses; an exemplary case theme (the “fraud triangle”); a lengthy list of Arkansas statutes frequently arising in litigated estate and trust matters; and citations to a few helpful general and Arkansas-specific secondary materials,  please click on the following link:    Written Materials For June 2016 CLE Presentation 

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Brief Thoughts On Claims Of Undue Influence

As stated in my previous post regarding the capacity of a testator to execute a will or trust, the two concepts are closely related.  For example, incapacity relates to invalidation of a will, trust, deed, etc. because of the testator’s own deficiencies (typically mental impairment).  Undue influence, however, is when the will, trust, deed, etc. may be invalidated by the actions of others because they allegedly exercised such a degree of influence and power over the testator thatthey were induced to act by something other than free will.

As a general matter, the less testamentary capacity that one possesses, the less proof of undue influence will be necessary.  A presumption of undue influence may be triggered by a confidential relationship between the testator and someone who is receiving a benefit from the document, such that the burden of proof can shift to the proponent of the document to prove that there has in fact been no undue influence.  Unless there is “procurement” involved, in Arkansas the proponent merely has the burden of proving no undue influence by a preponderance of the evidence (more likely than not, as opposed to a higher standard such as beyond a reasonable doubt).

Obviously influence is ever-present and we are constantly influencing others to take certain actions.  This is especially true in the context of family and other close relationships.  However, mere influence doesn’t necessarily equate to taking advantage of someone.

Accordingly, while a testator may be legitimately influenced by his children, for example, the influence may go too far if the kids dictate or control the testator.  Likewise, the mere existence of a confidential relationship between the testator and the beneficiary, or a close and affectionate relationship, may not in and of itself constitute undue influence although it can in some instances have the effect of shifting the burden of proof.

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Brief Thoughts On Claims Of Incapacity

People often question whether a deceased person was mentally capable of executing or changing a will or trust.  Perhaps the person was suffering from dementia at the time.  The legal question involved in these situations is typically whether the decedent had the requisite “testamentary capacity.”  Testamentary capacity has generally been deemed to mean sufficient mental ability to (1) understand and remember, without prompting, the extent and condition of the testator’s property; (2) understand the “natural objects of their bounty;” and (3) understand to whom the property is being given and on what terms. 

Testamentary capacity is not a particularly high state of mental capacity, but it can be rebutted in some instances by evidence of Alzheimer’s Disease, severe forms of dementia, severe illness, intoxication, etc.  These conditions need to have actually existed at the time of execution of the instrument in question.  For example, the mere fact that mild dementia is diagnosed years before the execution of the instrument does not necessarily mean that the testator lacked capacity when they executed their will or trust, because even a lucid interval of capacity (and people suffering from dementia often have “good days” and “bad days”) can be deemed sufficient.    

Capacity issues are very fact-intensive determinations, and lack of capacity is often pretty difficult to prove.  This is why capacity claims are often coupled with “undue influence” claims, which are often related, frequently alleged in the addition or in the alternative, and sometimes easier to prove.  Undue influence will be discussed in my next post. 

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Demographic Trends Suggest More Estate, Trust And Probate Litigation In The Decades To Come

I have long been interested in demographic trends, emerging technologies, cultural changes, and shifting societal patterns.  For example, 20+ years ago when I was in college I read Alvin and Heidi Toffler's  "War And Anti-War," which while a bit dated now predicts how future wars will be fought (but with an eye toward peace and avoiding such conflicts).   Similarly, about 5 years ago I read George Friedman's "The Next 100 Years:  A Forecast For The 21st Century,"  which was an eye-opening look at how our  nation and world may likely look in the years and decades to come.  I highly recommend either book for some fascinating reading, and it will be interesting to someday see how accurate or inaccurate their predictions were.

 Then,  a couple weeks ago I came across a very interesting article by a Georgia attorney named John J. Scroggin, in Wealth Strategies Journal,  which focused in particular upon 30 positive and negative trends that will impact estate planning over the next several decades:  "Where Is The Estate Planning Profession Going?"    While I focus much of my law practice upon estate, trust and probate litigation---as opposed to estate planning and drafting of wills, trusts, and the like---the article still addressed my areas of interest and I thought I would share a couple excerpts here.  Better yet, lawyers and laypersons   should take the time to read the entire article  which not only encompasses great analysis but also contains good references to other articles, checklists, outlines, etc.

               For example, with regard to estate and trust litigation in general Mr. Scroggin opines that:

               "(9) Estate and Trust Litigation. As a result of the combination of poorly drafted  documents, dysfunctional families, incompetent fiduciaries, greedy heirs, inadequate  planning and poorly prepared fiduciaries, estate litigation has been booming in the last  few decades. This growth will continue.

               One consequence of the increased litigation will be an increased effort by both individual and institutional fiduciaries to make sure estate and trust instruments provide for strong  fiduciary protection. We should anticipate more protective provisions in fiduciary  instruments, including broader indemnity provisions for fiduciaries, modifications of the  normal fiduciary standards and investment polices, broader use of no contest clauses,  limited liability for delegated powers and limits (or increases) on disclosures to  beneficiaries. These changes will increase the need to create counter-balancing powers  designed to protect beneficiaries (e.g., a wider use of Trust Protectors and fiduciary  removal powers). As a result, there will be longer discussions with clients and the  complexity of the documents will increase."

               Related to the foregoing are Mr. Scroggin's thoughts on avoiding estate and trust litigation altogether, through conflict minimization:

               "(10) Conflict Minimization. The corollary to estate and trust litigation is planning  designed to mitigate the potential sources of intra-family estate conflicts. According to  the Wealth Counsel 6th Annual Industry Trends Survey, the top motivation for doing  estate planning was to avoid the chaos and conflict among the client’s heirs. Many clients  have an abiding desire to establish structures which minimize the potential points of  conflict and provide a mechanism to resolve future family conflicts. Clients want to  dispose of assets in a manner designed to minimize family conflict - leaving a legacy of  relationships rather than a legacy of conflict. This is a growing part of the discussion with  clients and a part of their planning documents. Solutions include using personal property  disposition lists, looking at real or perceived conflicts of interest when appointing  fiduciaries, or passing the family business only to the children running the business. As  noted above, attorneys will need to spend more time talking with clients about providing  greater protections to fiduciaries and creating counterbalancing protections for heirs.

 Many individual fiduciaries agree to serve without fully understanding the potential  liabilities and conflict they may be inserting themselves into. Should attorneys provide written materials (perhaps signed by the client and the fiduciary) detailing the  responsibility of the fiduciary, the risk of conflict and the means by which the drafter has  tried to minimize those exposures? Should attorneys more thoroughly advise their clients  on the necessary skill   sets needed by their fiduciaries - instead of just accepting the  client's choices at face value?"

  In sum, as I have written before on this blog, American society is rapidly changing.  The Baby Boomers have begun retiring over the last many years and will continue to do so over the next 2-3 decades.  Large sums of wealth have been acquired and will be transferred to younger generations.  People are living longer, and the aging population will be less competent due to Alzheimer's Disease and other forms of dementia which will lead to conflicts over whether a deceased person had the requisite capacity to execute a will or trust.  These and other trends strongly support the notion that there will be increasingly more estate, trust and probate litigation in the decades to come.

               Matt House can be contacted by telephone at 501-372-6555, by e-mail at  mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Amendments To Wills And Trusts Can Result In As Many Or More Disputes As The Original Documents Themselves

Often estate and trust litigation revolves not around the will or trust itself, but rather changes to those instruments (a codicil to the will, an amendment to the trust, etc.).  That was the case in the recent appeal of Harbur v. O’Neal, et al., 2014 Ark. App. 119 (February 19, 2014).   The matter involved numerous issues, but one of them entailed the question of whether or not certain amendments to a trust were valid.  

Frequently the settlor of a trust has a legitimate reason for wanting to amend their trust.  Perhaps they want to change a successor trustee, remove or add a beneficiary, alter the trust’s assets, or there could be any number of other reasons why the trust may need to be amended.  However, it is important that the settlor of the trust amend their instrument with the competence to do so, of their own free will and volition, without being coerced, and without undue influence by someone else.  That was one of the disputes in the Harbur case.

Specifically, like so many cases that I handle and so many estate and trust litigation matters in general, this lawsuit involved battling siblings and children of the trust settlor.  One of the litigants, Jeanne, was found to have performed every step of obtaining information regarding a first trust amendment, she actually prepared the amendment, she produced and finalized the document, and she also benefitted from the amendment. 

The trial court held that because these facts supported a conclusion that Jeanne procured the trust amendment, a rebuttable presumption of undue influence arose and the burden of proof shifted to Jeanne to prove beyond a reasonable doubt that her mother had both the mental capacity and freedom of will at the time she executed the trust amendment.

Likewise, Jeanne also testified that she prepared a second trust amendment for her mother’s signature as well.  This amendment made Jeanne the sole beneficiary of the trust upon her mother’s death, and made Jeanne’s children sole beneficiaries of the trust if Jeanne did not survive her mother. 

Similar to the reasons stated for finding procurement with regard to the first trust amendment, the trial court also found that Jeanne had procured the second amendment.  The appellate court affirmed these rulings holding that there was overwhelming evidence of procurement, including but not limited to Jeanne’s own testimony.

A number of lessons can be learned from this case.  For example, this appeal demonstrates that the settlor’s intent should control and they should be able to dispose of their property as they wish, without coercion or undue influence from anyone.  If and when they do want to amend the trust, they either need to do it by themselves or preferably with the assistance of a trusted attorney who is acting solely in their interest and whom is independent from the beneficiaries. 

Further, a beneficiary should consider not preparing the trust amendment, even at the request of a settlor, because that beneficiary may be risking the validity of the very amendment from which they would benefit if someone attempts to set aside the trust amendment based upon procurement, undue influence, coercion, and the like.

In sum, amendments to wills and trusts are fertile ground for estate and trust litigation because frequently the changes are executed many years after the original documents are signed.  Amendments can, in a very short and sweeping document, fundamentally change the intent of the original estate planning documents and the assets disposed of by those documents.  Such amendments are sometimes signed in haste or at a point in the deceased person’s life when they may not fully understand or appreciate the nature of what they are doing (assuming the settlor signed the amendment(s) at all). 

With the stroke of a pen, millions of dollars and valuable real or personal property can be inherited by or administered by persons other than those initially envisioned by the original instruments.  For these reasons, as much or even more care should go into the preparation and execution of the amendments as go into the original versions.  Similarly, as much or more scrutiny should be paid to the preparation and execution of these amendments as was paid to the initial documents.

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Managing Someone Else's Money

 Estate, trust, power of attorney and probate disputes often develop due to disagreements over the manner in which someone managed another person's money. For example, the beneficiaries of a will might disagree with the executor's claim for fees related to administration of an estate.  Co-trustees might differ as to the best investments for maximizing the income and assets of a trust.  Two children might question the propriety of their third sibling's withdrawals of money from their mother's bank account, pursuant to a financial power of attorney that the mother apparently executed at some point in the past.

 To provide guidance in these situations, the Consumer Financial Protection Bureau has recently released 4 booklets entitled "Managing Someone Else's Money" which are intended for such persons as trustees, agents under powers of attorney, court-appointed guardians, and government fiduciaries.  Not only do they assist those who are honestly and legitimately attempting to assist in the management of money or property for a loved one, they also provide information on warning signs and things to look for when someone else is doing the managing of that person's finances.

 Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.